Northwest pilots set conditions for a merger...Article

[General Lee]

NWA pilots set merger conditions

Also Thursday, Gov. Tim Pawlenty suggested the option of
financial inducements to ensure a major airline's presence.

By LIZ FEDOR and PATRICIA LOPEZ, Star Tribune
Last update: January 18, 2008 - 12:07 AM

Leaders of the Northwest Airlines pilots union on Thursday
voted unanimously in favor of a resolution to explore a
potential airline merger.

The Air Line Pilots Association (ALPA) represents pilots at
Delta Air Lines and Northwest. If a Delta-Northwest merger
is proposed, the chances of a successful combination are
greatly enhanced if it has the endorsement of the airlines'
pilot groups.

"Northwest pilots would support a proposed merger with the
right partner," said Wade Blaufuss, a pilots union
spokesman. Under the resolution, he said, pilots would back
a merger only if four conditions are met:

• Northwest pilots must receive equity in the merged
company.

• Integration of the two carriers' pilot seniority lists
must be "fair and equitable."

• The labor agreement for the merged company must provide
pilots with "substantial improvements" to their current
contract.

• The merged airline must have "sufficient market presence
and network scope" that allows it to grow and produce
"sustainable profits."

The resolution does not name Delta, but Delta and Northwest
are engaged in merger negotiations.

"Protecting pilot jobs would be one of our highest
priorities in any merger involving Northwest," Blaufuss
said.

"Closing the Minneapolis-St. Paul hub would be in direct
conflict with our priority to protect pilot jobs, and
Northwest pilots would oppose any merger plan that called
for mass reductions in flying."

Many airline industry analysts have said they believe that a
Twin Cities hub would be preserved if Delta acquires
Northwest.

But Gov. Tim Pawlenty said Thursday that he's willing to
consider financial incentives to ensure that Minnesota
doesn't suffer major job or air service losses in a
Northwest merger with Delta.

Delta CEO Richard Anderson has pledged to his employees that
he will maintain Delta's name and Atlanta headquarters in
any merger deal.

Based on Northwest's lease and other agreements with the
Metropolitan Airports Commission (MAC), Pawlenty noted that
a merged carrier could be subject to legal and financial
penalties if it attempts to walk away from the commitments
Northwest previously made to the state to maintain its hub
and headquarters in Minnesota.

However, he said the state is aware that a merged airline
could choose to simply "cash out" those penalties. To
forestall that possibility, he said, the state is prepared
to consider tax concessions and other financial inducements.

"If that would make the difference, we're willing to have
that discussion," Pawlenty said during a State Capitol news
conference.

Pawlenty did not go into detail about what shape those
inducements might take or how large they might be. "We value
Northwest, and we want them to stay," he said.

Northwest employs about 12,000 people in Minnesota, with
2,300 of them working in Eagan. About 1,050 employees are
based there in the headquarters building.

Pawlenty made his comments a few hours after he sent a
letter to Northwest CEO Doug Steenland and Delta CEO
Anderson. In it, Pawlenty said, "Please let me know what
additional steps Minnesota can take to ensure continued
operations and presence in Minnesota at a high level."
Pawlenty also asked to meet with Anderson and Steenland.

Northwest currently leases 101 gates at Minneapolis-St. Paul
International Airport, with 22 leased through 2015 and 79
leased through 2020.

MAC spokesman Patrick Hogan said that lease terms require
Northwest to maintain its headquarters and hub in Minnesota.
If the carrier doesn't meet those conditions, Hogan said,
the airline would forfeit a rent reduction, valued at $68
million over the life of a lease, and Northwest's share of
airport concessions, which have an estimated value of $147
million through 2020.

In addition, Hogan said, another agreement requires
Northwest to immediately pay $245 million in bond debt if it
fails to keep its hub and headquarters in the Twin Cities.

Northwest spokeswoman Tammy Lee said the airline wants to
work with Pawlenty "to make sure that the state's air
transportation needs are met." She noted that the state and
Northwest have had a "long history of cooperation that has
produced important economic benefits."

When he was governor-elect in December 2002, Pawlenty
visited then-Northwest CEO Anderson at Northwest's
headquarters and pledged to form a "partnership" with the
airline. Standing alongside Anderson at a news conference at
Northwest, Pawlenty said he made the airline one of his
first business visits to send the message that "we want the
future for this airline to be here in Minnesota."

Northwest spokeswoman Tammy Lee said the airline wants to
work with Pawlenty "to make sure that the state's air
transportation needs are met." She noted that the state and
Northwest have had a "long history of cooperation that has
produced important economic benefits."

When he was governor-elect in December 2002, Pawlenty
visited then-Northwest CEO Anderson at Northwest's
headquarters and pledged to form a "partnership" with the
airline. Standing alongside Anderson at a news conference at
Northwest, Pawlenty said he made the airline one of his
first business visits to send the message that "we want the
future for this airline to be here in Minnesota."

[email protected] • 612-673-7709 [email protected]
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Good ole Liz Fedor again. If anyone doesn't agree with her, please call her at the above number...
And the NWA pilots said nothing about having to keep DTW or MEM open, or else...?


Bye Bye--General Lee

 

[airline#5]

Stop all this Merger crap. It won't happen. Way too many hurtles involved. I'll be back to tell you all "I told you so" in a year.

 

[Superpilot92]

Stop all this Merger crap. It won't happen. Way too many hurtles involved. I'll be back to tell you all "I told you so" in a year.

I agree!!! I do however think its great that the NWA union came out publicly and made their stance public.

 

[Sedona16]

IF these requirments could be met on both sides I think this could be a positive thing. Use the management desire for a merger to bargain for things that normally are given a blind eye. Not saying it will work but would be nice if it did.

• Northwest pilots must receive equity in the merged company.

• Integration of the two carriers' pilot seniority lists must be "fair and equitable."

• The labor agreement for the merged company must provide pilots with "substantial improvements" to their current contract.

• The merged airline must have "sufficient market presence and network scope" that allows it to grow and produce "sustainable profits."

Contracts trending downwards or "just trying to hold on to what we have" as with the SWA guys isn't the direction we need to go if the job of pilot is going to be worth having anymore. Somehow, someway we gotta turn this rig around and climb out of the pit we find ourselves. That requires airlines to make money and that requires pilots to force the issue of improvements in pay and work rules (ie quality of life). Perhaps this is a catalyst to towards that end.

 

[General Lee]

This point was important too:


"Protecting pilot jobs would be one of our highest
priorities in any merger involving Northwest," Blaufuss said.


That is a major key that has to be there, or no deal.


Bye Bye--General Lee

 

[Sedona16]

This point was important too:


"Protecting pilot jobs would be one of our highest
priorities in any merger involving Northwest," Blaufuss said.


That is a major key that has to be there, or no deal.


Bye Bye--General Lee

Certainly the burden will be on Anderson and company to show jobs wont be lost AND service will be maintained/improved and ultimately the mega carrier will not have an adverse effect on the flying public A tall order. Will be interesting to see if all the demands can be met and pass a majority regulatory scrutiny. If you were to listen only to Oberstar it doesn't look good. I wonder how many total people there are in on the decision within and outside of the antitrust guys.

 

[Bavarian Chef]

Uh ... seems to me this is just a statement on record, so when the deal goes down (it will) then the leadership can go back to the membership and say ... "We don't know what happened. We told them we wanted both cake and ice cream. Must've been some kind of mistake."

I know, I know, leadership = membership.

Should the General start a new category of post counting?:

1 category for non-Delta merger posts and one for Delta merger posts. That way he won't be superfluously padding his numbers.

 

[labbats]

Uh ... seems to me this is just a statement on record, so when the deal goes down (it will) then the leadership can go back to the membership and say ... "We don't know what happened. We told them we wanted both cake and ice cream. Must've been some kind of mistake."

I was thinking the same thing.

You can pretend all you want that pilots can demand something during a merger, but the history tells a different story. The future will no doubt follow suit.

 

[jrcpilot]

Certainly the burden will be on Anderson and company to show jobs wont be lost AND service will be maintained/improved and ultimately the mega carrier will not have an adverse effect on the flying public A tall order. Will be interesting to see if all the demands can be met and pass a majority regulatory scrutiny. If you were to listen only to Oberstar it doesn't look good. I wonder how many total people there are in on the decision within and outside of the antitrust guys.

I have to say after hearing Lee Moak speak over at DALPA HQ and talking with him afterwords I think both MEC's are working together to make this happen. He did not say that directly but he definitely seemed pleased about the discussions being had. Things seem to be progressing the way both parties want. Many folks are expecting a final decision and maybe even an announcement in mid-feb. Thats when the rhetoric will start to fly. This is going to get interesting very soon.

 

[G4G5]

Fences big and high.

If Republic and Hughes is any indication, 20 years, no Delta pilot under 45 will ever see and red tail (and vice versa).

This is not efficient and will only make the new carrier less competitive but in all reality big fences are the only way to ever get these two pilot groups together.

 

[Old School]

According to airlinepilotpay.com
NWA has 5457 total pilots
NWA has 4625 active pilots
NWA has 362 furloughed pilots
NWA has 470 on leave
DAL has 7140 total pilots
New Total would be 12597

 

[AlbieF15]

I'd say that total would shrink fast to about 10000 pilots...

Mergers are never good for the pilots...

 

[FDJ2]

in all reality big fences are the only way to ever get these two pilot groups together.

I wouldn't bet on that. If there is a merger there might be some fences, short fences, but at the end of the day one of the objectives of the integration would be to create one unified pilot group not two factions in one airline.

It'll take good faith discussions and negotiations, but it can be done.

 

[jonjuan]

It'll take good faith discussions and negotiations, but it can be done.

If you were a new hire at DL or NW, would you still be as optimistic?

 

[General Lee]

Senator Johny Isakson doesn't think so....

Certainly the burden will be on Anderson and company to show jobs wont be lost AND service will be maintained/improved and ultimately the mega carrier will not have an adverse effect on the flying public A tall order. Will be interesting to see if all the demands can be met and pass a majority regulatory scrutiny. If you were to listen only to Oberstar it doesn't look good. I wonder how many total people there are in on the decision within and outside of the antitrust guys.

This came from another article I posted about who wants the HDQ's where---this from GA Senator Johny Isakson:

Pawlenty's letter followed a powerful Minnesota congressman's comments opposing any merger among top airlines. "I don't think mergers are in the best public interest, and that includes this one," U.S. Rep. Jim Oberstar (D-Minn.) said.
As chairman of the House Transportation Committee, Oberstar's opinion could be important in any merger debate.

But Georgia's Isakson said he doubts that would stop a deal.
Isakson said he understands Oberstar's opposition to the idea. Northwest probably would cease to exist under a merger, and the combined airline would likely be headquartered in Atlanta.
"In the end, it's all about routes and convenience," Isakson told The Atlanta Journal-Constitution. "If Minneapolis-St. Paul is provided the same basic level of service, the noise [opposition] would be minimal."
Isakson, who knows Oberstar well and who spent six years on the Transportation Committee, said the congressman's comments opposing a Delta-Northwest merger are not surprising.
"That's the natural reaction to anybody in public life," Isakson said. "I have the same parochial interests. I want to make sure Delta stays Delta and keeps its headquarters in Atlanta."




I don't know if that would be enough, but Isakson sure is confident.

Bye Bye--General Lee